The Bet: Gold=$1,650 by 2011; The Wager $1M
My S. African pal Prieur du Plessis informs us of this interesting wager from Jim Sinclair: A $1 million wager for the price of gold over the next 3 years.
Assuming this is more than a marketing stunt, here are Sinclair's terms:
My position on timing and price is that Gold will trade at USD $1650 before the second week of January 2011.
I am offering a $1,000,000USD wager to a financially qualified party that this will occur within the stated timeframe. Any party on Bloomberg, CNBC or CNN-Business stating an opposite opinion on the price of gold should be informed of this challenge.
Please communicate to ANY vocal bearish so-called gold expert that I challenge them to put their money on their views.
Any commentator unable to financially meet this challenge should not be opining. If they really knew the gold and currency market they could easily meet the challenge.
The technical procedure of a serious wager is:
- Prove you can in fact wage the challenge by an attorney's letter.
- Segregate the funds in cash or near cash kind in the hands of your attorney.
- Execute an agreed upon binding contract stating the terms of the wager.
I have been a bull on commodities and Gold for quite some time. But there are plenty of Gold Bears out there. Will any of them rise to the bait?
~~~
UPDATE: April 3, 2008 6:43am
Neal informs us this is not a marketing ploy for several reasons:
1. Jim Sinclair is the CEO of TRE
2. His website www.jsmineset.com is a free website
3. He has been bullish on gold since the upper $200's
4. He has been dead on with his accuracy of where gold is going.
5. He is tired of the top callers of gold anytime gold has a correction
6. He is one of the country's top gold traders.
>
Source:
A $1 million wager for gold bears
Prieur du Plessis
Investment Postcards from Cape Town, April 2, 2008
http://www.investmentpostcards.com/2008/04/02/a-1-million-wager-for-gold-bears/
Wednesday, April 02, 2008 | 02:00 PM | Permalink
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» A $1 Million Gold Bet: I Sort Of Rise To The Challenge from The Stalwart
Again via Barry, apparently some longtime gold bull (gold bug) is willing to bet anyone $1 million that the price of gold will hit $1,650 by 2011 and he says that if you're not willing to bet him on this [Read More]
Tracked on Apr 3, 2008 8:01:36 AM
Comments
Not unless they would like to depart with their $1M. Sinclair should have them take out $1M in gold futures and DELIVER those ozs as payment instead of $1M in cash as the NPV only be $750K by then.
Posted by: Stuart | Apr 2, 2008 2:08:58 PM
In dollars?? How about betting that the purchasing power of that million will be alot less in one year let alone three??
Admire his balls though......
Ciao
MS
Posted by: michael schumacher | Apr 2, 2008 2:12:13 PM
What's to stop a publicity seeking pundit from taking the bet and hedging it?
Posted by: Estragon | Apr 2, 2008 2:15:55 PM
This actually looks like a good entry point for GLD both short and long term...at least it looks that way to me and I would love to be told YES or NO on that :)
Posted by: wnsrfr | Apr 2, 2008 2:19:35 PM
Just buy 600 oz of Jan 2011 way out of the money calls. Good odds.
Posted by: Ross | Apr 2, 2008 2:20:23 PM
what an idiot. as estragon says, just hedge it.
i'll take that bet with him. i'll then just buy $1mm of gold at current prices and sit on it til 2011.
between approx current and zero price, i lose less than $1mm on that but get paid $1mm by him.
if it goes up between current price and his level (but not quite there), i make on my position and get $1mm from him.
if it goes past his level, i make over $1mm on my trade and only pay him $1mm.
win/win/win. give him my email.
Posted by: 2and20 | Apr 2, 2008 2:20:29 PM
Um, just take him up on it, and sell puts on gold futures no?
Posted by: Soros | Apr 2, 2008 2:23:11 PM
Will someone loan me a million bucks to take him up on the offer?
I can use my dog as collateral!
Posted by: Jonathan | Apr 2, 2008 2:25:54 PM
Likely no hedging. It's going to be punitive.
Posted by: Stuart | Apr 2, 2008 2:26:44 PM
2and20:
You would lose money in that situation if gold went between $1650 and whatever the price of gold is now times 2 (I think it's $1900)
That being said this guy can hedge too...
Posted by: keith | Apr 2, 2008 2:42:37 PM
That's a ballsy bet.
Gold has to keep it steep uptrend intact for the next 3 yrs for his target to be hit.
It tells you where he thinks the dollar will be as well.
I'll have to make a mental note of this bet.
Posted by: blin | Apr 2, 2008 2:44:43 PM
I've got to think you could arbitrage this bet in the market. Right? At even money thats what it seems like to me. I haven't priced it up but it may be worth looking at.
Posted by: Jordan | Apr 2, 2008 3:15:21 PM
This should be posed to Paulson every time he says the US is for the strong dollar.
Posted by: tbapple | Apr 2, 2008 3:16:45 PM
If you hedge dude, whose ur counterparty? What if you owe Mr Sinclair segregated funds and your counterparty falls off the face of the earth? Nah! No risk of that out there.
Mike
Posted by: Mike R | Apr 2, 2008 3:17:13 PM
Gosh, why doesn't Prieur just buy some futures contracts and publicize it? The markets have already invented this particular game! :-)
Posted by: Sebastian Good | Apr 2, 2008 3:26:17 PM
Good point Sebastian,
He is obviously putting his reputation on the line. In this case, it's not about the money, but about being right!
.
Posted by: blin | Apr 2, 2008 3:35:17 PM
I can use my dog as collateral!
Posted by: Jonathan | Apr 2, 2008 2:25:54 PM
______
What kind of dog? The Fed might be interested.
Posted by: Marcus Aurelius | Apr 2, 2008 3:42:49 PM
Golden Retriever. sorry.
Posted by: Stuart | Apr 2, 2008 3:56:12 PM
Is this a sign of a top in gold? Tempted to say.
Posted by: Kuds | Apr 2, 2008 3:59:32 PM
Ive sent him an E-mail to take him on. Lets see if hes serious. I am.
Posted by: Mikael | Apr 2, 2008 4:16:11 PM
If it was, then it would also have to be a sign in a bottom in the dollar, which means it would also have to be a bottom in the financial stress, which means it would also have to be a bottom in real estate price deflation as well as a worsening federal fiscal deficit. So I'm thinking no, not a top.
Posted by: Stuart | Apr 2, 2008 4:17:20 PM
Per keith's comment above, using phyiscal gold to hedge, you'd have to buy $1.2mm worth of gold (at today's price of abt $900/oz) to have $1mm of gains at a $1650 price. The hedge would still be imperfect, but gold would have to drop below $150/oz before you lose any money. I say we pool funds and accept the bet!
Posted by: MarkC | Apr 2, 2008 4:23:27 PM
Mr. Sinclair is making his bet from the position of a man who has already made his fortune trading gold.
On the other hand, we have Bill Cara, some Canadian guy, who thinks Mr. Sinclair is a "clown." Considering Mr. Sinclair's record, that should at least be a respectful Mr. Clown.
Posted by: Max | Apr 2, 2008 5:25:20 PM
Like others observed...why does he need to bet anyone except the market? If he believes it so strongly, buy some gold.
It seems he wants to show how smart he is more than he wants, or even believes, his prediction will come true. If he truly believed gold would be $1650, he'd just quietly buy enough (about 1,500 oz) to yield himself a cool mil in 2011, discounted for time value, of course, and shut his mouth.
Posted by: DonKei | Apr 2, 2008 5:31:49 PM
i love it, Jim sinclair, way to go.
How anti-american, anti-Bernanke, anti-cnbc, anti-Kudlow
can you get ??
do anyone one of those turkeys want to wager ?? no balls ??
Posted by: rickrude | Apr 2, 2008 5:36:45 PM
